INFORMATION FOR BUYING, SELLING, OR TRANSFERRING PROPERTY IN NEW JERSEY

When buying, selling, or transferring real property in New Jersey, taxpayers should be aware of certain taxes, fees, and/or procedures that may arise in connection with the transaction. This page provides links for assistance with regard to the GIT/REP, Realty Transfer Fee (RTF), Controlling Interest Transfer Tax (CITT), and Bulk Sales.

GIT/REP: Estimated Gross Income Tax Payment Requirement for Nonresident Sellers of Real Property in New Jersey

N.J.S.A. 54A:8-8 through 8-10 require that nonresident sellers, transferors, and grantors, pay estimated gross income tax in the amount of 2% of the consideration paid on their sale of real property in New Jersey. The nonresident must remit the payment to the Division of Taxation before or at the closing and file the estimated gross income tax form, whether or not they have a gain on the sale or transfer. However, New Jersey recognizes certain exemptions and allows for a waiver of the estimated tax payment requirement, if appropriate, on Forms GIT/REP-3 and GIT/REP-4.

General Information

TB-57(R) Estimated Gross Income Tax Payment Requirements on Sales of New Jersey Real Property by Nonresidents

N.J.S.A. 46:15-7 et seq. imposes a realty transfer fee (RTF) on the seller of real property for recording a deed for the sale. The RTF is calculated based on the amount of consideration recited in the deed or, in certain instances, the assessed valuation of the property conveyed, divided by the Director’s Ratio. The RTF applies to every conveyance of title to real property in New Jersey, unless the deed or transfer meets an exemption as provided under N.J.S.A. 46:15-10 and 46:15-10.1.

RTF-1 Sellers must file the Affidavit of Consideration (RTF-1) with any deed in which they claim a full or partial exemption from the RTF. The instructions to the RTF-1 list the full and partial exemptions from the RTF.
RTF-8 When an application is made to the sheriff of any county for the sale of any real property, whether under execution or pursuant to any writ, judgment or order, a completed Affidavit of Consideration for Sheriff's Deeds (RTF-8) must be supplied to the sheriff. This affidavit lists the name of any other mortgagees and other holders of encumbrances and the current balance of all prior mortgages, liens, or encumbrances constituting consideration. The RTF-8 is not an exemption from the RTF.
RTF-3 Claim for Refund of Realty Transfer Fee
RTF-4 Filing of Protest of Realty Transfer Fee Assessment

Additional Fee on Certain Transfers of Real Property Over $1,000,000

As a supplemental fee to the RTF, N.J.S.A. 46:15-7.2 imposes a fee on the recording of the deed for the sale of real property when the consideration paid is more than $1,000,000. While the seller pays the RTF, the buyer pays this supplemental fee of one percent of the consideration recited in the deed. This additional fee applies to all deeds where the land conveyed is classified as follows: Class 2 residential; Class 3A where the property is a farm (but only if the farmland contains a building or structure intended or suited for residential use); Class 4A commercial (other than industrial or apartment); and Class 4C cooperative units. New Jersey recognizes certain exemptions from the supplemental fee. Information on the exemptions is in Box (2)(B) of the Form RTF-1EE.

RTF-1EE is the Affidavit of Consideration for Use by Buyers and must be annexed to every deed for consideration over $1,000,000 and with every commercial property transfer.

Controlling Interest Transfer Tax

N.J.S.A. 54:15C-1 imposes the controlling interest transfer tax (CITT) on the buyer. The CITT is a one percent fee on the transfer of a controlling interest in an entity that directly or indirectly owns certain real property. The CITT is only imposed if the real property is classified as “4A Commercial” and if the consideration or other valuation of the real property is greater than $1,000,000. The buyer is exempt from the CITT if they pay the additional fee on certain transfers of real property over $1,000,000.

The buyer, assignee, or transferee of any business assets, other than in the ordinary course of business, must notify the State at least 10 business days in advance, so that an escrow account can be established if the seller, assignor, or transferor has potential tax liabilities to the Division of Taxation. The bulk sales law may impose certain tax liabilities on the buyer of business assets, including real property, if proper procedures are not followed to allow the New Jersey Division of Taxation to determine the seller’s tax liability (if any).